Executive Summary
The automobile industry can be considered one of the most competitive industries that exists today. The production has to be flawless, the employees hardworking and the managers fully aware of their product. This case study discusses the Toyota production plant in Georgetown, Kentucky.
In July of 1988 Toyota Motor Manufacturing (TMM), USA began producing Toyota Camry sedans. Toyota implements the Toyota Production System (TPS) in their Georgetown plant, similar to all other production facilities. This system reduces cost by eliminating waste. Excess production consumes extra space and human resources to control the products. The two governing principles that Toyota modeled the TPS system after are Just-In-Time
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During the May 1st meeting of Lewis, DaPrile, Friesen and other managers in the overflow parking area it was found that 18 vehicles had various seat problems. A seat problem ranged from if a seat did not match the corresponding car when it arrived at the final assembly area or if the seat contained defects. All of these problems were handled in a similar way, the andon cord was pulled to alert the team lead and then the car was flagged to be alerted to Quality Control. From here the car would be sent to the Code 1 clinic area to see if the problem could be fixed, if not then the car was sent to the overflow parking area where it would wait until a new seat arrived from KFS.
Upon inspection into the overflow parking area one car was found to have been flagged on April 27th, this time delay was unacceptable because the maximum amount of time in this area should be two shifts. This seat problem was starting to become a large factor that would affect the production ability within the Georgetown plant. Many possible answers exist that would help Toyota mitigate the risk with the seat sets supplied from KFS. A failure investigation would be the best course of action. This would find the problem and address the issue so it would stop the repeating problem from occurring. While the investigation is ongoing interim solutions could take place that could also be implemented in the long term if
TOYOTA PRODUCTION SYSTEM (TPS) The TPS model depends on its Human Infrastructure. The entire model is base on its PEOPLE & TEAMWORK being successful in doing their job and there buy in to the Key Elements of the TPS culture, which are as follows; Selection Ringi decision making Common Goals Cross-Trained TPS emphasize the point of its human infrastructure as a “COMMON GOAL” for all personnel in the corporation, which again is emphasize that its employees are its greatest assets as shown by the
Overview: The Toyota Production System has long been hailed and admired as the source of Toyota’s outstanding performance as a manufacturer. TPS aims to eliminate waste, reduce defects and maximize flow. TPS aims to increase efficiency and productivity by employing a unique production system that cuts costs through continuous improvement. Long term goal is to yield sharp reductions in product development and manufacturing lead times. Toyota want to be the industry best and they stand behind their culture to share the wealth of how they do it.
Target Corporation uses an interesting capital-budgeting system. Projects are proposed using Capital Project Requests (CPRs) and must be approved before money can be spent. The level of approval needed depends on the amount being requested. For projects requiring less than $100K, lower management can approve, but anything above this amount goes to the Capital Expenditure Committee (CEC) which is comprised of 5 executive officers. For projects requiring greater than $50 million, the Board of Directors must approve.
Today, Toyota is the world's third largest manufacturer of automobiles in terms of both unit sales and net sales. It is also the largest Japanese automotive manufacturer, producing more than 5.5 million vehicles per year, equivalent to one every six seconds. See Appendix 1 for a list of its guiding principles. Appendix 2 depicts excerpts from the company’s 2000 annual report showing their main goals for that year. The company has 12 manufacturing plants in Japan and approximately 54 manufacturing companies in 27 countries throughout the world. These plants produce vehicles and components under the Lexus and Toyota brand names and employ about one quarter of a million people worldwide. In total Toyota vehicles are marketed and sold in more than 160 countries and regions with the automotive business, including sales and finance of the vehicles, accounting for more than 90% of the company's total sales. Appendix 3 shows worldwide sales and appendix 4 shows the models produced in North American Toyota plants. North Americanization of Toyota Since the late 1980’s Toyota had made several moves that showed their commitment to what management called the North Americanization of the company. The idea was to increase car sales in the lucrative North American market by also introducing manufacturing plants that produced parts and assembled whole vehicles for
The success of the automotive parts manufacturing industry is, at its core, derived from the health of the automotive industry as a whole. Conveniently, the
Answer: In our judgement, PepsiCo did not have a moral obligation to divest itself of all its Burmese assets. The reason being:
Tesla Motors Inc. is an American public company which is known worldwide because of its experience in designing, manufacturing and also the selling of electric cars and electric components for vehicles. The motor was started back in the year 2003 in San Carlos, California in the United States (Teslamotors.com, 2014). The company had its headquarters in Palo Alto and at the time of its inception, Elon Musk was its chief executive officer (CEO) (Hunger, 2010).
As if this weren’t enough, quality problems mounted week after week. Only months later in February 2010, the NHTSA revealed that it had received claims citing another life threatening defect in the break system for the Toyota Prius. More than 400 thousand Prius recalls resulted. In April of 2010, customers reported handling issues in the Lexus brand which resulted in another recall of 9,400 Lexus cars and a “Don’t Buy: Safety Risk” rating from Consumer Reports. Also in April, the company voluntarily recalled Siennas to address a problem with corrosion on a spare tire cable. Later that month, Toyota voluntarily recalled 2003 Sequoia SUVs to improve the stability controls. 2010 Tacomas were also recalled for defective front drive shafts. Once the quality icon, Toyota had hit a really low point; so low that credit
In the 1960's Toyota linked together quality, customer satisfaction, and profit. These became pillars for Toyota's foundation and the company's baseline for growth and expansion. In 2009, the company's recalls started with what was deemed a floor mat issue. “Over the next four months, the company recalled 3.4 million more vehicles in three separate recalls over and above the initial 3.8 million, for a total of more than 7 million” (Cole, 2011). The issues were linked to different things; Sticky gas pedals, more floor mat problems, software glitches, and electrical problems. But one fact remained, the percentage
Toyota believes that to make high-quality vehicles, the quality of each supplier's components plays an important role. Therefore, the original philosophy of Toyota's supply chain collaboration is to reduce long-term costs by establishing long-term partnerships with suppliers instead of traditional ones. Based on this close long-term relationship, we help suppliers to build on Toyota's ever-improving thinking and culture, import Toyota's production system (TPS) to share information and knowledge, learn and pursue improvement together. Hence, Toyota invests a lot of time, and human resources efforts in the fields of purchasing, engineering, manufacturing and management, and even evaluates the selected
So let’s evaluate these alternatives. By implementing the first solution, to continue the attempt to solve the problem off the line, the benefits are no stoppage to the production process, and therefore, a potential cost savings. However, this benefit is short term. The downsides are numerous and most likely more costly in the long run. Until the problem is solved run ratios will continue to be low, defects will be high, and the overflow lot will continue to grow – excessive waste will continue to happen. In addition, customer value will continue to be threatened. Also, by stopping the production line time and time again to deal with the defective seat, the flow of the production line will still be disrupted. And, since this alternative might not utilize those employees that are closest to the production line, there is a large risk that the root cause of the problem will never be uncovered. TPS philosophy stands by the fact that the employees are their greatest asset, as they have been trained to get the root of the problem.
G. According to US News, the 2016 Toyota Prius was ranked #9 in compact cars, #5 in hybrid and electric cars, #8 in hatchbacks, and #10 in small cars (“2016 Toyota Prius | U.S. News & world report,” n.d.). It retails between $24,200 and $30,000 which is considered a compact car. “The Toyota Motor Corporation is a multinational corporation and now the world 's largest automaker in terms of sales, net worth, revenue, and profit according to Fortune Global 500. Toyota is positioned in the moderately low-price, high volume market” (“Strategic analysis of Toyota motor corporation,” 2003). They did move more into the higher-priced market with the Lexus brand and worked to fill the need for electric vehicles with the Toyota Prius. The company is diversified in various markets within the automobile industry and are able to branch out in several directions.
By 2007, Toyota was leading its industry as the largest automotive manufacturer in the world. Operating under a strong growth strategy, their reputation for exceptional quality and high safety ratings coupled with operational efficiency promoted their competitive advantage. Furthermore, Toyota was principally the symbol of excellence and a benchmark for every other company. When examining their strategy under Porter’s model Toyota maintains a strong combined plan focusing on both cost leadership and broad differentiation. Through the process of lean daily management and just-in-time delivery Toyota led the manufacturing world with a distinguished level of efficiency. Examining their success and processes, manufacturing was transformed and Toyota was the envy of many. Additionally, through innovation Toyota actively sought differentiation as a generic tactic. Hybrid technology was successfully implemented into their Prius model vehicles and the Prius became the first, pioneering mass-produced vehicle of its kind.
main strategy for the North American market is to aim for higher sales, while raising the proportion of locally produced automobiles. Toyota Motor Corp have reached a stage where investments made over the last several years to expand production capacity are beginning to show returns and improved profitability can be expected. Toyota’s goal is to bolster local production through additional investment, and contribute to the regional economy by expanding its operations. At present, our production capacity in North America is approximately 1.25 million units (including our joint venture with GM). However, Toyota Motor Corp plan to boost this to 1.45 million units during 2003.
Toyota Production System (TPS) focuses on the philosophy of eliminating all waste. It can be trace back to its origin – automatic loom which was firstly introduce by Sakichi Toyota. During the past few decays, TPS has evolved through generations by trial and error to improve the efficiency. This is mainly based on the concept of JIT.